Hispanic and Asian populations are expected to grow by more than 2% every year until 2030 (U.S. Census Bureau, 2008). Children of both racial groups tend come from immigrant families (Portes & Rumbaut, 1990) of disadvantaged socioeconomic backgrounds (Niedzwiecki & Duong, 2004) that share collectivistic values (Hofstede, 1980; Oyserman, Coon, & Kemmelmeier, 2002). One difference is that Hispanic students have been shown to struggle in school while Asian American children perform well academically. In 2008, 18.3% of Hispanic adolescents were high school dropouts, compared to 9.9% of African American, 4.4% of Asian American, and 4.8% of European American students (NCES, 2010). These statistics are alarming given the negative developmental sequelae of academic failure, including delinquency (Dishion, Patterson, Stoolmiller, & Skinner, 1991), substance use (Crosnoe, 2006), depression (Masten et al., 2005), unemployment, and health and mental health problems (Vander Stoep, Weiss, Kuo, Cheney, & Cohen, 2003). School failure is costly to society, as it is linked with increased involvement in crime (Davis, Lewin, & Hops, 1999; Ronis & Borduin, 2007) and need for social services (Lindbeck, 2006; Wright & Campbell, 2005). While demographic factors and family socialization practices contribute to ethnic differences in achievement, they do not entirely explain them (Fuligni & Huynh, 2008; Patterson & Fangzhou, 2010; Sue & Okazaki, 1990). The peer group has more recently been investigated as a potential influence in ethnic differences in achievement because (1) it is an important socializing context in students' achievement (Veronneau, Vitaro, Pedersen, & Tremblay, 2008), (2) ethnic and gender differences in school attitudes emerge as children transition to adolescence (Taylor & Graham, 2007), coinciding with an increase in importance of peer appraisal (Berndt, 1982), (3) there is evidence that whether children's academic performance is rewarded or punished by peers varies by sociocultural context (Nakamoto & Schwartz, 2010) and ethnic/gender group (Duong & Schwartz, in preparation). The proposed research will examine longitudinal relations between social functioning with peers and later academic outcomes and whether these links vary by adolescent's ethnic/gender group, the academic values of their friends, and their sense of whether achievement is part of their ethnic group's identity (called 'embedded achievement,' see Oyserman, Harrison, & Bybee, 2001). In addition, mediators of the association between gender/ethnic group and academic achievement will be examined, including peer group values and embedded achievement. These questions will be answered using 3 years of data from the Academic Success Project (ASP), which includes 1513 Hispanic and Asian students (Grades 6-8). Finally, the proposed research will use knowledge gained from ASP data and a components analysis of existing interventions to inform the development of a comprehensive intervention to increase academic achievement among ethnic minority youth that includes a focus on shifting peer processes.